A person who signs an official document (such as a loan, contract, or law) with another person; a person who cosigns something; a joint signer of a promissory note. Most courts find the exception to discharge for student loans applies not only to student borrowers but also to parents, spouses, or non-relatives who co-sign a […]

Collection Actions

Actions taken to collect federal or state tax debts or debts we collected for other government agencies (“other agency debts”). The actions include: levy (take) funds from bank accounts, seize (take) property and sell it to pay your debt, and revocation or denial of renewal of a business or professional license. Source

Collection Agencies

An organization that specializes in debt collection is known as a collection agency or debt collector. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. There are many types of collection agencies. First-party agencies are often subsidiaries of the original company the debt […]

Collection Fees

The collector payment system is structured so that the contractors keep a portion of the money they collect. Collection contractors charge the Department of Education (“the Department”) a contingent fee for any payments made by the borrower on a loan placed with the contractor by the Department. The Department passes these costs to borrowers to […]

Compounding Interest

Compound interest (or compounding interest) is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. Thought to have originated in 17th-century Italy, compound interest can be thought of as “interest on interest,” and will make a sum grow at a faster rate than simple […]


A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs. Most federal student loans, including the following, are eligible for consolidation: Subsidized Federal […]

Consolidation Loans

There are two types of Consolidation loans, FFEL (Federal Family Education Loans) and Direct Consolidated Loans. Often but not always, when viewing the loans in the NSLDS (National Student Loan Data System,) the subsidized and unsubsidized portions of the loans are delineated as two separate consolidated loans. Consolidating loans does not always benefit the borrower […]


The act of signing for another person’s debt which involves a legal obligation made by the cosigner to make payment on the other person’s debt should that person default. Having a cosigner is way for individuals with a low income or poor/limited credit history to obtain financing. Source

Counseling Requirements

The HEA includes counseling requirements when borrowers first incur loans and after they withdraw or graduate. Initial counseling is supposed to occur prior to the release of the first loan disbursement. In general, schools must ensure that entrance counseling is conducted with each direct subsidized or unsubsidized loan student borrower prior to making the first […]


A creditor may be a bank, supplier or person that has provided credit to a company. In other words, a person or company owes money to its creditors. The amounts owed to creditors are reported on the company’s balance sheet as liabilities. If a creditor required the company to sign a promissory note for the […]